Exit and Growth Strategies for Middle Market Businesses

Trying to read the markets to determine when is the best time to sell your company, or buy one for that matter, can be confusing. Q4 of 2012 showed the strongest M&A activity in 4 years. Q1 of 2013 was much weaker than anticipated. Low interest rates should make it attractive for Buyers to finance their acquisitions, but it may also be interpreted as an economy not quite out of the IC unit yet. The historically high levels of cash in the balance sheets of corporate America and at Private Equity’s disposal suggest that sellers should be having a field day sorting potential buyers for their companies; however, the same data could be seen as unequivocal sign of inflation in the horizon. The stock market appears to be back on record-breaking mode… not unlike what happened in 2000 and 2008.

I am not a pessimist, quite the contrary! I do believe we are past the bump and well into a period of responsible expansion. My point here is that data can be read and interpreted in different ways and that many variables, often subjective, will affect how one views his/her options.

Selling your company is a business decision surrounded by emotions. If, over the past year or two you have taken the steps to prepare yourself and your company for that moment, and now you feel that your time is right, then embrace your decision and go to market with confidence. You will be successful.

If, on the other hand, you don’t feel that you are ready but you see the time to make a decision looming, seek professional advice now. It’s never too soon to have a good understanding of the available options and of what it will take to prepare and position your company to be attractive to each type of prospective buyers.

Over the life of your business, it is very likely that you will have experienced booms as well as busts. Regardless of the situation, you adapted, organized your resources, and delivered your product or service with the same conviction. Exiting a business is no different: it is just the last of a series of strategic business decisions that you have been making as a manager throughout the life of your company. As with all those decisions, when YOU are ready to pull the trigger, don’t hesitate.

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